UNITED STATES OF AMERICA, PETITIONER V. R. ENTERPRISES, INC., AND
MFR COURT STREET BOOKS, INC.
No. 89-1436
In The Supreme Court Of The United States
October Term, 1989
On Petition For A Writ Of Certiorari To The United States Court Of
Appeals For The Fourth Circuit
Reply Memorandum For The United States
The court of appeals held that before the government may enforce
compliance with a grand jury subpoena for corporate business records,
it must establish that the subpoenaed materials would be "relevan(t)"
and "admissible as evidence at trial." Pet. App. 10a. The court
emphasized that unless grand jury subpoenas are held to such a strict
threshold standard, they might be used as "a means of discovery in
addition to that provided by Fed. R. Crim. Pro. 16." Id. at 9a.
Applying that standard, the court quashed the subpoenas for
respondents' corporate records. It concluded that the subpoenaed
materials "would most likely be inadmissible on relevancy grounds at
any trial that might occur," and that the records would therefore
"fail to meet the requirement() that any documents subpoenaed under
Rule 17(c) must be admissible as evidence at trial." Id. at 10a.
In our petition, we explained that the decision below cannot be
squared with this Court's cases involving the role and functions of
the grand jury. Moreover, we stated, the court of appeals' decision
is in conflict with both the majority rule in the circuit courts
(according to which the government need not make any preliminary
showing of relevance in order to secure compliance with a grand jury
subpoena), as well as with a minority rule (which imposes a modest
threshold requirement on the government). Because the court of
appeals' novel standard also threatens to disrupt routine grand jury
investigations -- as the present case vividly illustrates -- the
petition for a writ of certiorari should be granted.
1. We restate the court of appeals' decision because respondents
evidently have no desire to defend it on its own terms. Instead,
respondents defend a very different principle -- one never articulated
by the court below.
This is how respondents describe the "rule announced by the Fourth
Circuit": "(w)hen a subpoena, seeking records related to activities
protected by the First Amendment, is challenged on the grounds that
the documents sought are unrelated to the criminal investigation, the
Government is obliged to make a showing that (the) records demanded
are 'substantially' related to the grand jury investigation." Br. in
Opp. 6. The short answer is that the court of appeals announced no
such rule. What the court said is that "any documents subpoenaed
under Rule 17(c) must be admissible as evidence at trial." Pet. App.
10a. The court then applied that rule in deciding to quash the
subpoenas in this case -- finding that the subpoenaed materials "would
most likely be inadmissible on relevancy grounds at any trial that
might occur." Ibid. Respondents do not quote the court's actual
language, let alone explain how that language can be squared with
respondents' quite different rendition of the decision below.
Respondents misread the court of appeals' decision in a second
respect. As respondents view it, the rule adopted by the court of
appeals applies only to subpoenas for records "related to activities
protected by the First Amendment." Br. in Opp. 6. But the court of
appeals did not confine its holding in that fashion. What the court
said is that "any" record subpoenaed by the grand jury -- whether or
not "related" to First Amendment activity -- "must be admissible as
evidence at trial." Pet. App. 10a. The court of appeals' decision
therefore sweeps quite broadly, and cannot on its face be confined in
the way respondents suggest.
2. In any event, First Amendment principles do not support the
court of appeals' decision -- even if, as respondents contend, the
decision could be confined to subpoenas for records related to
activities protected by the First Amendment. In the first place,
respondents do not explain why the First Amendment provides any
protection to routine corporate records (as opposed to the actual
videotapes). /1/ Although respondents assert that the subpoenas will
"inevitably chill the exercise of free expression" (Br. in Opp. 9),
they offer no support for that prediction. And "(b)are allegations of
possible first amendment violations are insufficient to justify
judicial intervention into a pending investigation." Dole v. Milonas,
889 F.2d 885, 891 (9th Cir. 1989).
What is more, even if the First Amendment were applicable to
respondents' corporate books and records, it would not insulate
respondents from the duty to respond to a grand jury subpoena. As
this Court explained in Branzburg v. Hayes, 408 U.S. 665, 682 (1972),
"the First Amendment does not invalidate every incidental burdening of
the press that may result from the enforcement of civil or criminal
statutes of general applicability." /2/ Applying that principle, the
Court in Branzburg held that the First Amendment does not shield a
reporter from having to answer a grand jury's questions concerning an
ongoing criminal investigation. See also New York v. P.J. Video,
Inc., 475 U.S. 868 (1986) (no special exemption for video store from
the probable cause standard for search warrants); Herbert v. Lando,
441 U.S. 153 (1979) (no special exemption for the media from the
general rules of pretrial discovery); Zurcher v. Stanford Daily, 436
U.S. 547 (1978) (no special immunity for the press from search
warrants); SEC v. McGoff, 647 F.2d 185 (D.C. Cir.), cert. denied, 452
U.S. 963 (1981) (upholding subpoena issued by the Securities and
Exchange Commission for corporate records relating to transactions
with South Africa); In re Grand Jury Matter (Gronowicz), 764 F.2d
983, 989 (3d Cir. 1985) (Garth, J., concurring), cert. denied, 474
U.S. 1055 (1986).
3. Respondents contend that by showing that R. Enterprises, Inc.,
and MFR Court Street Books, Inc., did no business in Virginia (Br. in
Opp. 5), respondents demonstrated that the subpoenaed records bore "no
conceivable relevance to any legitimate 'investigation'" (id. at 12).
Having made that initial showing, respondents assert, the burden
shifted to the government to "make a minimal showing of relevanc(e)"
-- a burden which, in respondents' view, the Government failed to
carry. Ibid. That contention is mistaken for two reasons.
First, respondents once again defend a legal standard different
from the one actually adopted by the court of appeals. As noted, the
court of appeals imposed on the government the initial burden to prove
that the subpoenaed materials would be relevant and admissible at
trial. The court did not hold that the government's burden is
triggered only when the target of the subpoena first demonstrates that
the subpoenaed material "bears no conceivable relevance to any
legitimate 'investigation.'" Br. in Opp. 12. The latter standard --
which respondents derive (see ibid.) from In re Grand Jury Subpoena
(Battle), 748 F.2d 327 (6th Cir. 1984), and In re Liberatore, 574 F.2d
78 (2d Cir. 1978) -- constitutes, as we noted in our petition (at
13-15), the majority rule among the circuits. Significantly, however,
that was not the rule applied by the court of appeals. There is
therefore no reason to suppose that the majority of circuits would
"fully support the Fourth Circuit's conclusion" in this case. Br. in
Opp. 12. /3/
Second, and in any event, respondents did not demonstrate that the
subpoenaed records bear no conceivable relevance to the grand jury
investigation. Although respondents asserted, by affidavit, that R.
Enterprises and MFR Court Street Books conducted no business in
Virginia, the grand jury was not required to accept that assertion on
faith. See United States v. Morton Salt Co., 338 U.S. 632, 642-643
(1950) (the grand jury "can investigate merely on suspicion that the
law is being violated, or even just because it wants assurance that it
is not"). Moreover, even if respondents transacted no business in
Virginia, that would not render the subpoenaed records irrelevant to
the grand jury investigation. At a minimum, the records might
demonstrate a pattern and practice of obscenity violations, including
out-of-state violations, and thus constitute evidence of knowledge and
intent on the part of Martin Rothstein -- who, as the district court
found, owned not only the respondent companies but also Model
Magazine, which did conduct business in Virginia. See Pet. App. 60a.
4. The actual holding of the court of appeals not only conflicts
with decisions of this Court and of other courts of appeals, but also
threatens to "saddle (the) grand jury with minitrials and preliminary
showings" that will "assuredly impede its investigation and frustrate
the public's interest in the fair and expeditious administration of
the criminal laws." United States v. Dionisio, 410 U.S. 1, 17 (1973).
The history of this case provides an excellent illustration of that
danger. The subpoenas to R. Enterprises and MFR Court Street Books
were first issued in April 1988. More than two years later,
respondents have yet to produce the required documents. The court of
appeals' decision strongly encourages such delaying tactics, and
should be reversed.
For the foregoing reasons and those stated in our petition, it is
respectfully submitted that the petition for a writ of certiorari
should be granted.
KENNETH W. STARR
Solicitor General
MAY 1990
/1/ Cf. United States v. Coates, 692 F.2d 629, 633-634 (9th Cir.
1982) (Internal Revenue Service summons for corporate minute books of
a church results in only an incidental burden on religion and is
therefore enforceable); United States v. Grayson County State Bank,
656 F.2d 1070, 1073-1074 (5th Cir. 1981) (IRS summons for bank records
of a church did not impermissibly chill the exercise of religion),
cert. denied, 455 U.S. 920 (1982); United States v. Freedom Church,
613 F.2d 316, 320 (1st Cir. 1979) (IRS summons to church pastor for
books of account, bank records, and lists of contributors upheld
against free exercise and free association claims). Because the
subpoenas at issue in this petition sought only routine corporate
records -- and not the actual videotapes -- the cases cited by
respondents at page 7 n.6 of their brief in opposition do not apply.
/2/ Respondents contend (Br. in Opp. 6) that in Branzburg this
Court "held" that whenever "a grand jury investigation impinges upon
activities protected by the First Amendment, * * * a prosecutor must
show that there is 'a substantial relation between the information
sought and a subject of overriding and compelling state interest.'" In
fact, Branzburg holds no such thing. Instead, the Court, noting that
some of its prior cases had adopted a strict standard for "even an
indirect burden on First Amendment rights," explained that the
subpoena in Branzburg met that standard, assuming it was applicable.
408 U.S. at 700. Respondents give a very misleading characterization
of the Court's opinion in Branzburg by omitting the first several
words of the very sentence that they quote from the case: "If the
test is that the government 'convincingly show a substantial relation
between the information sought and a subject of overriding and
compelling state interest,' * * *." Ibid. (emphasis added).
/3/ Although respondents speculate that the majority of circuits
would "fully support the Fourth Circuit's conclusion" in this case
(Br. in Opp. 12), respondents do not dispute the fact that the legal
standard applied by the court below is in sharp conflict with the
majority rule.